25, March 2017

The Finance Ministry has written to 10 public sector banks making it clear that the lenders would only get further capital infusion once they submit a time-bound turnaround plan.

Background:

The government’s move to crack the whip on lenders comes after some banks reported losses in financial year 2015-16 as well as for the nine-month period of the current financial year. Bad loans zoomed following the Reserve Bank of India’s asset quality review, which required banks to classify many accounts identified by the banking regulator as ‘bad’.

In its financial stability report, RBI had said banks may remain risk averse in the near future as they clean up their balance sheets and their capital position may remain insufficient to support higher credit growth. According to RBI data, gross non-performing assets of commercial banks increased to 9.1% of their gross advances as of September 2016, from 5.1% a year earlier. Public sector banks share a disproportionate burden of this stress.

Way ahead:

The Centre, which has mandated State Bank of India’s merchant banking arm SBI Caps to vet each bank’s plan, had recently written to the state-owned lenders stipulating that they would each have to sign a Memorandum of Understanding (MoU) with the government, agreeing to stick to the turnaround plan.

Now, the government wants 10 public sector banks to turn around in the next three years.

Mission Indradhanush:

In 2015, under the Indradhanush plan, the government had announced capital infusion of ₹70,000 crore in public sector banks for four years, starting from 2015-16.

In the first two financial years, ₹25,000 crore had been earmarked per year with ₹10,000 crore to be disbursed in each of the remaining two years.

However, credit rating agencies had pointed out that the sum was insufficient as banks needed to meet Basel-III norms as well as make provisions for rising bad loans.

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2.ICHR to study if Ram Setu is man-made

Source: The Hindu

The Indian Council of Historical Research (ICHR) is set to undertake an archaeological exploration to find out whether the Ram Setu is a natural or man-made phenomenon.

It will undertake the exploration in October and November, before deciding whether a detailed underwater archaeological excavation is required to probe deeper.

What’s the issue?

The bridge between the coasts of Tamil Nadu and Sri Lanka has been at the centre of controversy since the Sethusamudram shipping canal project was planned, requiring dredging in the area. It is a 30-km-long stretch of limestone shoals that runs from Pamban Island near Rameshwaram in South India to Mannar Island off the northern coast of Sri Lanka.

While some claim the Setu was a bridge was built by Lord Rama’s “Vanar Sena” (army of apes and monkeys) and hence cannot be touched, others insist it is a naturally formed chain of lime shoals.

The matter reached Supreme Court with petitions challenging the government’s decision to construct the Sethusamudram Canal by dredging a portion of the Ram Setu. The project is being commissioned under the marine technology training programme of ICHR dealing with under-water archeology and research scholars will be given training for this purpose.

Depending on the success of the project and the material gathered, a decision on further exploration will be taken by ICHR. A group of 15-20 research scholars will be selected across the country and will be trained to conduct the research.

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3.CCI imposes ₹591 crore penalty on Coal India

Source: The Hindu

Fair trade regulator Competition Commission of India (CCI) has imposed a penalty of₹591.01 crore upon Coal India Limited (CIL) on finding that CIL and its subsidiaries violated the Competition Act by imposing unfair and discriminatory conditions in Fuel Supply Agreements (FSAs) with power producers for supply of non-coking coal.

Apart from ordering CIL and its subsidiaries to “cease and desist” from anti-competitive practices, the CCI also directed modification of the FSAs.

CIL had also been directed to ensure uniformity between old and new power producers as well as between private and PSU power producers.

Background:

The Competition Act, 2002 prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and Merger and acquisition), which causes or likely to cause an appreciable adverse effect on competition within India.

About CCI:

Competition Commission of India is a body responsible for enforcing The Competition Act, 2002 throughout India and to prevent activities that have an adverse effect on competition in India. It was established on 14 October 2003. It became fully functional in May 2009.

CCI consists of a Chairperson and 6 Members appointed by the Central Government.

The duty of the Commission is to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India.

The Commission is also required to give opinion on competition issues on a reference received from a statutory authority established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues.

Global energy architecture performance index was recently released by Geneva- based World Economic Forum (WEF).

The report:

The report, developed in collaboration with Accenture Strategy, ranked 127 countries based on their ability to provide energy across three dimensions of the ‘energy triangle’.

Being compiled since 2013, the Energy Architecture Performance Index (EAPI) is a composite index that focuses on tracking specific indicators to measure the energy system performance of 127 countries.

It has 18 indicators defined across the three sides of the ‘energy triangle’ — economic growth and development, environmental sustainability, and energy access and security.

Performance of India:

India has marginally improved its position to 87th place this year. India’s rank improved three places from 90th last year. India ranks among the worst in the world for pollution.

India is gradually improving its performance on the index, but faces an uphill battle to increase energy access and security (95th).

A large percentage of the population still lacks access to electricity (101st) and uses solid fuels for cooking (108th).

India, just like China, boasts of a strong score on the indicator for diversification of import counterparts (5th), but its energy system continues to face some significant challenges, particularly in environmental sustainability (109th).

India has some of the lowest scores in the EAPI for CO2 emissions from electricity production and PM2.5 levels (117th and 123rd, respectively).

While sources of pollution are diverse and intermittent (such as agricultural crop burning, refuse combustion, fireworks), the energy sector is a large, consistent contributor to this issue of major concern.

Many solutions have been attempted with varying degrees of impact, but the country sorely needs a comprehensive plan of action to implement an effective and sustainable answer.

Global scenario:

Switzerland topped the annual list and was followed by Norway, Sweden, Denmark and France in the top five.

According to the findings, the world’s biggest energy consumers struggle to take leading positions on the index as they grapple with inherent challenges of their large, complex energy systems and are outperformed by more nimble economies.

Overall, some of the largest consumers of energy such as China (95th), India, Japan (45th), the Russian Federation (48th) and the United States (52nd) have either slipped in the rankings or experienced only marginal gains.

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5.Environment Ministry official to chair animal welfare board

Source: The Hindu

The Animal Welfare Board of India (AWBI), a statutory advisory body under the Union Ministry of Environment, Forests and Climate Change (MoEF), will now be permanently chaired by a senior MoEF official, according to a notification made public by the government.

The notification specifies that for the next three years, the Board would be chaired by the Director-General (Forests) for its term.

Background:

In its 55-year history the organisation has always been chaired by somebody outside government, such as veterinarians, animal welfare activists or retired judges. This is the first time that a government official is chairing the body.

Animal Welfare Board:

The Animal Welfare Board of India was established in 1962 under Section 4 of The Prevention of Cruelty to Animals Act, 1960.

The Board consists of 28 Members, who serve for a period of 3 years.

The Board was initially within the jurisdiction of the Government of India’s Ministry of Food and Agriculture. In 1990, the subject of Prevention of Cruelty to Animals was transferred to the Ministry of Environment and Forests, where it now resides.

It frames a range of rules on how animals ought to be humanely treated everywhere.

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6.UK govt certifies India’s request for extradition of Vijay Mallya

Source: The Hindu

India’s request for extradition of industrialist Vijay Mallya, who has been declared a proclaimed offender, has been certified by UK secretary of state.

The UK home department has conveyed that the request of India for extradition of Mallya has been certified by the secretary of state and sent to the Westminster Magistrates’ Court for a district judge to consider the issue of releasing of warrant.

The development is a step towards securing the extradition of the fugitive businessman wanted in India for loan default of over Rs 9,000 crore.

What is extradition?

Extradition refers to the surrender of a criminal to one country by another. The process of extradition is regulated by treaties between the two countries.

Extradition is important because it helps to maintain the sanctity of the penal code of one country or territory.

The penal code says that it shouldn’t apply its criminal law to a person who committed an offence outside its territories except when the crime is related to the country’s national interest.

What are the internationally accepted conditions for extradition?

The crime done by the accused should fall in the category of dual criminality. This means that it should be a punishable offence according to the laws of both countries – the one where the accused has taken refuge, and the one that seeks extradition.

Persons charged for political reasons are generally not extradited.

There are countries where capital punishment is banned. If a fugitive has taken refuge in such a country, and if the establishment of that country thinks that, if extradited, the accused might get capital punishment, the country most likely refuses to extradite.

Extradition laws in India:

In India, the Extradition Act, 1962, regulates the surrender of a person to another country or the request for arrest of a person in a foreign land. According to the act, any conduct by a person in India or elsewhere mentioned in a list of extradition offences punishable with a minimum one year of imprisonment qualifies for an extradition request.

The process of extradition is to be initiated by the central government. Currently, India has extradition treaties with 38 countries.

If there is no treaty with the country from which the fugitive is to be extradited, then there aren’t any defined guidelines for the law to be applied and procedure to be followed.

In such a scenario, a lot depends on the cooperation and coordination between different authorities of the two countries. Another option is to resort to a Mutual Legal Assistance Treaty wherein both countries agree to exchange information in order to enforce criminal laws.

If the extradition request comes from two or more countries, then the government has the right to take the call to decide which country is fittest for the request. Since 2002, India has extradited 44 fugitive criminals to various countries. On the contrary, India has got 61 criminals extradited to itself from different countries since 2002.

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